Where The Bucks Are

Kathy Ledesma doesn't own an iPod. Or an Xbox. Or a stretchy pair of sweats with juicy on the rear. She doesn't drink Bud Light. Or wear Nikes. Or paint her nails with Hard Candy's Peep Show pink. She bought her dining room table during the first Bush administration, and has used the same mayonnaise since 1971. She's a little confused about whether Nelly and Nelly Furtado are the same person.

From Madison Avenue's standpoint, the 52-year-old Encinitas, California, art-glass entrepreneur is a has-been. Washed up as a consumer. A marketer's black hole. Send a message out to her, common wisdom says, and you're throwing money at a lost cause--a person with calcified brand preferences; an already overstocked larder, wardrobe, and garage; and little interest in the kind of spending that makes marketers merry.

But a small avant-garde of trend-tracking marketers is now challenging that axiom. Dismiss Ledesma and her peers at your peril, they say. If you do, you're likely to miss the biggest, richest, most lucrative market of the future: boomer women.

Given marketers' obsession with youth--a fixation that began, not surprisingly, in the 1960s when the boomers themselves were adolescents--this may seem an odd cohort to target. But the numbers don't lie.

The 40-plus age group is now 45% bigger than the 18-to-39 group and will be 60% bigger by 2010. In 1989, adults 40 and older became the biggest adult segment for the first time in U.S. history, making them the new customer majority. The leading edge of the boomer cohort--which encompasses people born between 1946 and 1964--is 58 now, and if past experience is any indicator, the group that humorist Joe Queenan called "the most self-important generation in history" is likely to transform middle age and beyond, much as it did puberty, early adulthood, and thirtysomething.

More important, boomers have bucks. Lots of bucks. According to Mature Marketing & Research, a Boston-based firm, they control more than half of the nation's discretionary income and three-quarters of the country's financial wealth. And they're likely to get their hands on even more. Boomers' parents, the Silent Generation, are dying off, and inheritances will spell the largest intergenerational wealth transfer in history. Add it all up, and by 2010, spending by people 40 and older will be "a trillion dollars greater than spending by people between the ages of 18 and 34--$2.6 trillion versus $1.6 trillion," says David Wolfe, author of Ageless Marketing (Dearborn Trade Publishing, 2003).

And the folks wielding the turbocharged wallets are most often women. Consider Ledesma, who over the past year spent $10,000 on kilns, torches, and tools for her art-glass business, Bluesdawg Creations. She and her husband, Pablo, also bought a new refrigerator, a Ford SUV, and a dorm room's worth of furnishings for her college-age daughter, Jessica. They took trips to Las Vegas, Virginia, and Tucson, and sprang for tickets to Simon and Garfunkel and Lyle Lovett. "I make almost all the purchasing decisions in our house," Ledesma says. "I do the research, we discuss what I've found, and then Pablo says, 'Yeah, honey, whatever.' "

That's not atypical behavior in American households. Regardless of age, women in America disproportionately decide where a family's funds will be spent. According to Martha Barletta, author of Marketing to Women: How to Understand, Reach and Increase Your Share of the World's Largest Market Segment (Dearborn Trade Publishing, 2003), women control or influence 80% of all purchases of both consumer and business goods and services. They have sole or joint ownership of 87% of homes and buy 61% of major home-improvement products. They account for 66% of all home-computer purchases and 80% of all health-care services. They carry 76 million credit cards, 8 million more than men. And they start 70% of all new businesses. "In a nutshell," says Barletta , "women are the ones spending the money, and boomer women have more money to spend."

Not to be too ghoulish about this, but keep in mind, too, that women tend to outlive their husbands by about 15 years. According to Mark Alarik, president of Sales Overlays, a Chicago-based advertising and sales promotion firm, that means that "the combined wealth of both sides of the family is heading straight for baby boom women's wallets." Mabel, let's go shopping!

You would think that marketers would be on this group like ants at a picnic. You would be wrong.

"Every year, when we announce our year-end sales, analysts ask us, 'So, who's your new competition this year?' " says Charlie Kleman, CFO of Chico's, the hugely successful women's clothing store that sells to boomer women. "We always answer, 'Nobody.' I don't know why there aren't more stores like us out there. This woman is crying out for someone to sell her clothes that keep her in style and will fit her body the way she wants, and nobody's doing it."